MARC FABER: Sure Gold Is Down, But Apple Is Down By Twice As Much

Marc
Faber, author of the the Gloom
Boom & Doom Report, was on Bloomberg
TV with Trish Regan and Adam Johnson to talk about it.

Faber is an optimist. He thinks this sell-off is presenting
a buying opportunity.

He also thinks we should think of gold relative to the other
asset classes.

"I would
just like to make one comment," he said. "At the moment, a
lot of people are knocking gold down. But if we look at the
records, we are now down 21% from the September 2011 high.
Apple is
down 39% from last year's high."

"I love the markets. I love the fact that gold is finally
breaking down. That will offer an excellent buying opportunity. I
would just like to make one comment. At the moment, a lot of
people are knocking gold down. But if we look at the records, we
are now down 21% from the September 2011 high. Apple is down 39%
from last year's high. At the same time, the S&P is at about
not even up 1% from the peak in October 2007. Over the same
period of time, even after today's correction gold is up 100%.
The S&P is up 2% over the March 2000 high. Gold is up 442%.
So I am happy we have a sell-off that will lead to a major low.
It could be at $1400, it could be today at $1300, but I think
that the bull market in gold is not completed."

"$1300. Nobody knows for sure but I think the fundamentals for
gold are still intact. I would like to make one additional
comment. Today we have commodities breaking down including gold.
At the same time we have bonds rallying very strongly. If you
stand aside and you look at these two events, it would suggest
that they are strongly deflationary pressures in the system. If
that was the case, I wouldn't buy stocks or sovereign bonds
because the stock market would be hit by disappointing profits if
there was a deflationary environment."

On gold falling lower if we have a deflationary
environment

"Yes, I agree. That's why I said if the gold market collapse is
saying something about deflation and at the same time we have
this sharp rise in bond prices and the signals are correct that
we have deflation, I wouldn't buy stocks because in a
deflationary environment, corporate profits will disappoint very
badly."

On whether a deflationary environment is possible right
now:

"Everything is possible…In the economy of the cuckoo people that
populate central banks, everything is possible. What you have is
gigantic bubbles, the NASDAQ in 2000, then the housing bubble and
then commodities in 2008 when oil went from $78 to $147 before
plunging to $32 within sixth months. That kind of volatility
comes from expansionary monetary policies from money-printing."

"All I'm saying is that I think we're going to have a major low
in gold in within the next couple of weeks. Gold, as of today,
you should actually buy as a trade. I think it can rebound in the
next two days by $40."

On why gold will rebound $40 in the next two
days:

"Because we are about in gold as oversold and we were essentially
during the crash in 1987. From there we have a strong rebound.
All I am saying as a trader I would probably enter the market
quickly for a rebound of $20 or $40. From a longer term
perspective, I would give it some time. We may go lower. I am not
worried. I am happy gold is finally coming down, which will
provide a very good entry point."

On whether investors should also stay in cash:

"My argument is that you should always have in this kind of high
volatility environment a fair amount of cash because
opportunities will always arise again and again and if you have
cash you can then buy assets at a reasonable price. I think
Patience is very important in this environment. The question is,
how do you hold your cash? Hopefully not with a Cyprus bank."